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dc.contributor.authorMiles, William
dc.date.accessioned2017-05-25T18:39:28Z
dc.date.available2017-05-25T18:39:28Z
dc.date.issued2000-05
dc.identifier.citationMiles, W. International Advances in Economic Research (2000) 6: 221
dc.identifier.issn1083-0898
dc.identifier.urihttp://dx.doi.org/10.1007/BF02296103
dc.identifier.urihttp://hdl.handle.net/10057/13164
dc.descriptionClick on the DOI link to access the article (may not be free).
dc.description.abstractMuch of the volatility in emerging markets in the 1990s stems from the fact that the major form of foreign investment is the bond rather than the bank loans which predominated until the debt crisis of the 1980s. Bondholders are too dispersed to negotiate with during a liquidity shortfall. Thus, a shortage of reserves becomes a full-blown crisis. This was not the case in the 1980s when banks, as the major creditors, often lent to countries in arrears. The risk to a loan is therefore rescheduling, while the risk to a bond is default. Empirically pricing loans and bonds as assets reveals that bonds incorporate the greater risk of default into their spreads. Debentures are thus riskier credit than loans. As developing countries now obtain most finance through these risky instruments, the volatility of the 1990s is better understood.
dc.language.isoen_US
dc.publisherKluwer Academic Publishers
dc.relation.ispartofseriesInternational Advances in Economic Research;v.6:no.2
dc.titleThe pricing of risk in emerging credit markets: bonds versus loans
dc.typeArticle
dc.rights.holderCopyright 2000, International Atlantic Economic Society


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